Investor · Washington, Washington D.C. · Member since 2013 · 15 posts · 3 votes
Hi, I wonder how holding an airbnb/short-term corporate housing property will impact my ability to secure conventional loans for future investment properties.
I am about to list my apartment on airbnb, which basically provides short-term housing similar to a hotel. There will be no leases involved, just confirmations from the website I believe. I understand that airbnb will also issue a tax form at the end of the year to me, based on the reservations booked on the website. I do not know how often the property will be vacant, but the property is in a popular neighborhood in Washington DC near metros and Amtrak.
I intend to buy more investment properties soon, and I wonder how a bank will regard this airbnb asset that I will hold? What sort of documentation can I generate to help tell its story, or am I only going to have to rely on the yearly tax statements from airbnb? Or will this move make me seek other funding sources?
Gotcha. It should reflect on your schedule E of your federal tax returns. The lender will use the schedule E to determine what the net rental income is. If you plan on obtaining more real estate prior to the tax returns getting filed and therefore have no rental income reflecting on your last schedule E then you may need to tell the story such as you have done here and show them past reservations, etc. in order to justify the likelihood that the income will continue. the lender is concerned with continuance income here and in a traditional situation would require some type of lease agreement or proof of receipt of rental income. I don't think you're going to have trouble getting another loan if I understand you correctly.
Thanks Jesse! Yes, I am used to the traditional situation of having an executed lease agreement. A bit anxious in trying to go for a hopefully more lucrative, but more transient, model of renting.